Synopsis

Thesis Title:
Value Chain Reconfiguration

Name : Anand S. Karmarkar Enrollment No: MO !""#$ %& 'uide Name : Mr (.).Kelkar*M.Tech.
Integration of operation management goals with the mission of organization requires adoption of measures capable of pulsing mission accomplishment situation while operations are going on. Supply chain, as an increasingly used concept in operations management, could be supported by the concepts of customer satisfaction and profit margin to get integrated with main goals of any for-profit organization. Value chain view provides such insight and lets the mission of the organization remain in focus while lowerlevel decisions and functional processes are dealt with. Every activity in a value chain could be cost driver and or value driver. !onfiguration of these cost and value drivers refers to their locational and relational position. "fter agreement on what are going to be core values for the organization, relative positions of value chain activities should be consciously reviewed periodically to identify opportunities for contributing to core values of organization through repositioning or redesigning and strengthening value activities. #he term value chain reconfiguration implies to such strategic revision decisions. $pportunities % and threats % for improving performance of the organization not only lie within internal chain of value activities of the organization, but also could be found out of the organization boundaries and among its e&tended value chain. "cquiring of e&ternal gains needs sound analysis and cost and benefit evaluations for ma'ing decision regarding the way of reacting to the identified opportunities. Virtual value chain orchestration as proposed by its introducer provides a framewor' for identifying and capturing such opportunities. Value Chain is the term coined by (arvard academic )ichael Eugene *orter in his boo' !ompetitive "dvantage+ !reating and Sustaining Superior *erformance ,-./01, and is described by him as those activities that an organization engages in as it concerns the production, mar'eting, delivering, and support of its products and or services. #he notion of the value chain should be seen as operating at two levels, namely micro level and macro level ,2ainbird, 3445167In the micro level, value chain operates as an analogy for the way actual processes within the firm itself interact. In the macro level, value chain operates as a description of the industry framewor' within which the firm operates.8,ibid1

Value chain configuration concerns allocation of value chain activities across chain of parties involved in the related operations. "ccording to Er and )ac!arthy ,ca. 344916 7!onfiguration of a firm:s worldwide activities is concerned with where and in how many places in the world each activity in the value chain is conducted. !onfiguration ranges from concentrated - that is performing all the value chain activities in one location to serve the world - to dispersed, which means performing various activities in the value chain in different countries.8

Problem description
;ecision ma'ing on redesigning networ' of value activities, of course needs models and criterions for <udgement. #he first issue is determining of the ob<ective of value chain. In this thesis wor', profit margin improvement is set as the holy grail of the value chain sta'eholders, which implies that reconfiguration decisions are % and should be - targeting this profit improvement in a distinct time frame favorable for shareholders of company.

Purpose with the thesis work

It will be beneficial to model and calculate captured value through reconfiguration of the value chain and this thesis wor' aims to do so. #his calculation, however, requires a criterion for measuring value created and captured before and during reconfiguration of the value chain. So another purpose with the thesis wor' is defining value measurement criterion,s1 to ma'e it possible to evaluate reconfiguration decisions. =or sa'e of achieving goals mentioned above, economic value added ,EV"1 will be introduced as a recommended measurement method to evaluate worthiness of value chain reconfiguration decisions. EV" that is calculated as firm:s turnover less operating and capital costs will be assumed equivalent to the concept of 7margin8 in *orter:s value chain, so that improvement of EV" would mean e&pansion of margin.

Methodology
#he research in this thesis is partly e&planatory nature and partly e&ploratory. E&planatory specifications are due to it:s strive to identify relationships among value chain, economic value added and virtual value chain orchestration concepts. E&ploratory specifications are due to its purpose to propose hypothesises e&tracted from that e&planatory phase. >iterature review is the main method used in this thesis wor' to e&tract concepts and then by convergence of the e&tracted concepts, propositions are offered in order to capture the goal of value chain reconfiguration, which is e&panding profit margin of the value chain. ?y synthesizing of concepts of value chain, proposed by )ichael E. *orter ,-./01, economic value added, proposed by Stern Stewart ,-..41 and virtual value chain orchestration, proposed by "ndreas (interhuber ,34431, some propositions for improving and measuring 7value8 created and captured by reconfiguration of the value chain will be *roposed. Structure of thesis + #he first chapter is used to introduce the topic .#he second chapter I used to describe methodology used in thesis. #he chapter three @ four chapter is used formation of frame and analysis of value chain .#he chapter five will be used to calculate EV"." conclsuin

List of references
-."A2"B">, 2. C., "D; (E22IFE#, (., #he advent of manufacturing technology and its implications for the development of the value chain, International Journal of Physical Distribution & Logistics Management GonlineH, 95 ,9 51, "vailable from+ http+ site.ebrary.com.lib.costello.pub.hb.se lib boras ;ocIidJ-440/K9K 3.;E !(E2D"#$DF, >., ("22IS, =., 2I>EF, =. ;., 3444, "dded value+ its nature, roles and sustainability, European Journal of Marketing GonlineH, 95 ,- 31, "vailable from+ http+ www.emeraldinsight.com Insight View!ontentServlet6<sessionidJ9KE?".?/9K4K? 9"4;"LEL.3K3--?/9E=I=ilenameJ*ublished Emerald=ull#e&t"rticle "rticles 44L4954

-49.html 9.BICI*E;I", )ergers and acquisitions, "vailable from+ http+ en.wi'ipedia.org 5. 2"ID?I2;, )., 3445. " framewor' for operations management+ the value chain, International Journal of Physical Distribution & Logistics Management GonlineH, 95 ,9 51, "vailable from+ http+ site.ebrary.com.lib.costello.pub.hb.se lib boras ;ocIidJ-440/K9K